Twelve states and the District of Columbia impose estate taxes in addition to the federal estate tax, which has a top rate of 40%, according to a new report from the Tax Foundation. In addition, six states levy inheritance taxes, and one state imposes both an estate and an inheritance tax.
Most estate and inheritance taxes are progressive, with the tax on a decedent’s estate or a beneficiary’s inheritance exposed to rates that increase with the total value of assets.
Because a decedent’s estate pays state taxes before it distributes assets to heirs, the tax is imposed on the overall value of the estate. Inheritance taxes are remitted by the recipient of a bequest based on the amount distributed to each beneficiary.
See the gallery for estate and inheritance taxes in 17 states and the District of Columbia.
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